# FAQ

**Q: How will rUSD maintain its peg? How will the protocol stay solvent?**

A: Reservoir provides a peg stability module that allows anyone to convert rUSD to USDC at parity and at no cost. rUSD issuance will be calibrated to avoid any liquidity crunch scenario. An important aspect of the rUSD peg is the assets that collateralize the stablecoin protocol. With a healthy mix of liquid DeFi assets and RWA collateral, the protocol provides a significant differentiating factor in higher yields and how uncorrelated and more stable it is to the digital asset market.

**Q: How does the protocol manage periods of high market volatility?**

A: The multicollateral approach to the Reservoir balance sheet creates flexible infrastructure to keep yields at or above market rates. Through lending rate and funding rate exposure, Reservoir is able to capture bull market yields. During bear markets or slow periods, Reservoir is able to obtain exposure to more consistent, risk averse yields such as Treasury bills offchain.

**Q: How does the protocol safely store and manage funds?**\
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A: Reservoir uses Gnosis Safe and institutional MPC wallets to custody, transact, and set parameter changes onchain.

**Q: What is the steakRUSD position on the balance sheet?**\
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A: SteakrUSD is similar to how Spark works for Maker. The protocol mints rUSD and supplies it to the morpho SteakrUSD market or in some cases users supply rUSD into the SteakrUSD market. See the [lending market page](/products/lending-market.md) for a more detailed explanation.

**Q: What are the Pendle rUSD and Pendle wsrUSD positions on the balance sheet?**\
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A: rUSD and wsrUSD are minted to help bootstrap the Reservoir Pendle LP markets. It is all fully collateralized and doesn’t create a depeg risk. rUSD supply is increased by the protocol balance sheet and is allocated into the two LP markets and burned at the end of the maturity or rolled into the next maturity. All rUSD is redeemable 1:1 for USDC on the balance sheet and the balance sheet is overcollateralized.


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